National Property Acquisitions Pty Ltd v IDS Investments Group Pty Ltd
[2021] QCAT 24
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- Unreported Judgment
- National Property Acquisitions Pty Ltd v IDS Investments Group Pty Ltd[2021] QCAT 24
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National Property Acquisitions Pty Ltd v IDS Investments Group Pty Ltd[2021] QCAT 24
National Property Acquisitions Pty Ltd v IDS Investments Group Pty Ltd[2021] QCAT 24
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | National Property Acquisitions Pty Ltd v IDS Investments Group Pty Ltd [2021] QCAT 24 |
PARTIES: | National Property Acquisitions Pty Ltd t/as Workshop Art Gallery |
(applicant) | |
v | |
IDS Investments Group Pty Ltd | |
(respondent) | |
APPLICATION NO/S: | RSL155-20 |
MATTER TYPE: | Retail shop leases matter |
DELIVERED ON: | 27 January 2021 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member Deane |
ORDERS: |
That material must:
4:00pm on 19 March 2021 That material must:
|
CATCHWORDS: | LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – JURISDICTION, POWERS AND APPEALS OF COURTS AND TRIBUNALS – OTHER MATTERS – whether an interim order should be granted restraining the lessor from taking an alleged prescribed action during the response or extension period – whether damages an adequate remedy COVID-19 Emergency Response Act 2020 (Qld), s 4A, s 23, s 25, Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 48, s 58 Retail Shop Leases Act 1994 (Qld), s 5B, s 55, s 63, s 64 Retail Shop Lease and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld), s 5, s 6, s 9, s 12, s 21, s 26, s 27, s 41, Schedule 1 Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Amendment Regulation 2020 (Qld) |
APPEARANCES & REPRESENTATION: | |
Applicant: | David Young |
Respondent: | Kerry Dramountanis |
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) |
REASONS FOR DECISION
- [1]National Property Acquisitions Pty Ltd t/as Workshop Art Gallery (‘the Tenant’) leases premises from IDS Investments Group Pty Ltd (‘the Landlord’). It appears uncontroversial that Mr Young is a director of the Tenant and that he has signed a guarantee in respect of the lease. There is some evidence that the premises are a retail shop.[1]
- [2]
- [3]On 23 November 2020 an urgent directions hearing was held with the parties appearing by telephone and directions were made for the parties to file submissions and evidence in support of the Application for interim order and in response. Mr Newcomb, the Landlord’s property manager, was given leave to represent the Landlord for that directions hearing only.
- [4]The Landlord’s Application for leave to be represented has yet to be determined in respect of the on-going proceeding.[4] Leave for representation is primarily required where a party is required to attend the Tribunal in person or by phone e.g. a directions hearing, a compulsory conference or a final hearing.
- [5]No submissions were received from the Tenant in accordance with directions issued. There is some evidence before me that Mr Young is ill and a person on Mr Young’s behalf, apparently holding Mr Young’s power of attorney, has sought an extension of time to file material.
- [6]An Application for leave to be represented[5] has been filed. It is somewhat unclear. In part it appears to seek leave for Ms Burrell to represent Mr Young. Mr Young is not a party to this proceeding. The Tenant is a different legal entity to Mr Young. Mr Young, as director, appears to have signed a certificate of authority appointing Ms Burrell as a representative of the Tenant. Directions in respect of both Applications for leave to be represented have issued.
- [7]I have considered whether to allow a further period for the Tenant to file submissions and evidence in support of its Application for interim order either in conjunction with the Application for leave to be represented or separately or to proceed to decide whether an interim order should be made. If an extension of time for submissions is granted it will cause delay in resolving both the interim order and any final order.
- [8]The Tribunal may make an interim order on its own initiative.[6]
- [9]The Landlord filed submissions in response to the Application for interim order.[7] It requests that the restraining order made 23 November 2020 be dissolved and that no extension be given for the Tenant to file submissions in support of the Application for interim order.
- [10]The Notice of dispute states that the Tenant wants orders:
- (a)to continue to trade on premises (sic);
- (b)negotiate covid rental agreement;
- (c)negotiate bond and rent payment plan.
- (a)
- [11]Attached to the Notice of dispute is a copy of a Form 7 Notice to remedy breach of covenant dated 7 November 2020 from the Landlord to the Tenant (‘the Notice’). It relies upon a claimed failure by the Tenant to pay rent for the months of June, July, August, September and October 2020 and a failure to pay a security bond.
- [12]The Application for interim order states the following orders are sought:
Stop breach of covenant and re-enter of premises under Covid
Continue to trade in the premises
October mandatory commercial lease rent relief
- [13]Essentially, as I understand it, the Tenant is seeking orders that the Landlord comply with section 12(1) of the Retail Shop Lease and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld) (‘the Regulations’) as provided by section 12(3) of the Regulations and to restrain the Landlord from acting in reliance upon the Notice.
- [14]The COVID-19 Emergency Response Act 2020 (Qld) (‘the COVID Act’) is part of the State Government’s response to the pandemic. It provides for the making of regulations in respect of relevant leases, including regulations prohibiting certain conduct by lessors and providing for the conferral of jurisdiction to hear and decide disputes.[8]
- [15]The COVID Act provided that such regulations were to be made before and expire on the COVID-19 legislation expiry day.[9] The COVID Act was initially to expire 31 December 2020.[10] The COVID Act now provides the COVID-19 legislation expiry day means the earlier of 30 April 2021 or another day prescribed by regulation.[11]
- [16]The Regulations initially provided for a response period commencing on 29 March 2020 and ending 30 September 2020.
- [17]Effective 29 September 2020, the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Amendment Regulation 2020 (Qld) (the Amendment Regulation) amended the Regulations and introduced the concept of the extension period starting at the beginning of the day on 1 October 2020 ending at the end of the day on 31 December 2020.[12]
- [18]The COVID Act defines:
- (a)‘relevant lease’ to mean a retail shop lease under the Retail Shop Leases Act 1994 (Qld) or a lease prescribed by regulation.[13]
- (b)‘lease’ to include a lease, sub-lease, licence or other agreement under which a person grants a right to another person to occupy premises, other than as a residence.[14]
- (a)
- [19]The Regulations prescribe that a relevant lease is a lease, other than a retail shop lease, under which the leased premises are to be wholly or predominantly used for carrying on a business.[15]
- [20]Business means an undertaking, whether or not for profit, including the manufacture, sale or supply of goods or services and a trade or profession.[16]
- [21]If the lease is not a retail shop lease, there is some evidence that the leased premises are wholly or predominantly used for carrying on a business.
- [22]As I understand it, the Tenant contends its lease is an ‘affected leases’ for the purpose of the Regulations. At the directions hearing, Mr Newcomb informed me that the Landlord accepted that the lease was an affected lease. The Landlord’s written submissions do not seem to contest that the lease is an affected lease.
- [23]A lessee under an ‘affected lease’[17] may apply to the Tribunal or a court for an order requiring the lessor to comply with section 12(1) of the Regulations.[18] That provision prohibits a lessor under an affected lease from taking a prescribed action on certain grounds including failure to pay rent or outgoings for a period occurring wholly or partly during the response period or the extension period.
- [24]A prescribed action is defined to include an action under a lease or the starting of a proceeding for recovery of possession, termination of the lease or exercising a right of re-entry.[19]
- [25]As I understand it, the Tenant contends that the giving of the Notice or at least actions that the Landlord may take in reliance on the Notice constitute a prescribed action for the purposes of section 12(1) of the Regulations and that the Tribunal has power to order the Landlord to comply with section 12(1) of the Regulations.[20]
- [26]There are exceptions to the requirement that a lessor must not take a prescribed action as set out in section 12(1) of the Regulations.[21]
- [27]The Landlord, as I understand its submissions, relies upon exceptions that:
- (a)
- (b)the Notice relies upon a breach of the lease other than those referred to in section 12(1) of the Regulations, being breach of the obligation to pay the security bond.[23]
- [28]
- [29]The Landlord has not directed me to, and I have not located, a provision of the lease indicating when the security bond was payable.
- [30]The parties have not addressed the usual factors for the making of an interim restraining order such as:
- (a)why a restraining order is required to protect a party’s position for the duration of the proceeding or is required to secure the effectiveness of a final decision;[27]
- (b)why damages are not an adequate remedy if the Landlord takes action contrary to law;
- (c)
- (a)
- [31]The Tenant is seeking to enforce a statutory prohibition.
- [32]The Regulations provide that in a proceeding for an order requiring the lessor to comply with section 12 (1) of the Regulations, the Tribunal may make any order it considers appropriate and may award costs against the lessor or the lessee.[29] The Regulations do not expressly provide an entitlement to damages for a contravention nor do they expressly exclude such an entitlement.
- [33]The making of an interim order restraining the Landlord from relying upon the Notice pending a final determination of the Tenant’s entitlement to such an order would protect the Tenant’s position for the duration of the proceeding. I am satisfied that, in the Tenant’s circumstances as I understand them based on the limited evidence currently before the Tribunal, and given the Regulations do not expressly provide a right to damages for contravention of the statutory prohibition, it is in the interests of justice to make an interim order.
- [34]It is appropriate to make directions to assist with the timely determination of the substantive application as to whether the Tenant is entitled to a final order requiring the Landlord to comply with section 12(1) of the Regulations. The right to apply to the Tribunal in section 12 of the Regulations is, in my view upon a proper interpretation of the Regulations, in addition to the right to apply to the Tribunal in section 41 of the Regulations, which is reliant upon the mediation processes provided for by the Regulations.
- [35]There is some evidence before me that Mr Young decided not to comply with the Tribunal’s directions because he thought the parties were close to a resolution of the issues between them. Whilst resolution by agreement is encouraged, unless the dispute is resolved unilateral non-compliance with the Tribunal’s directions is not appropriate and may lead to the Tribunal dismissing the proceeding.[30]
Other matters
- [36]There has been a multitude of emails sent to the Tribunal since the directions hearing, some of which appear to simply be communications between the parties or between persons on behalf of Mr Young and the Landlord or its property manager.
- [37]Any document sent to the Tribunal ought to also be sent to the parties to the proceeding. However, communications between the ‘parties’ are not required to be sent to the Tribunal unless they are attached to statements of evidence to be relied upon by a party in seeking orders. Sending to the Tribunal all communications between the ‘parties’ unnecessarily increases the workload of the Tribunal and creates delays in processing Applications properly before the Tribunal.
- [38]Where orders are being sought from the Tribunal an application in a prescribed form should be filed. Email communications will not necessarily be brought to the Tribunal’s attention.
- [39]There is some information before me which indicates the Tenant wishes to amend the Notice of dispute to claim relief other than to enforce the statutory prohibition in section 12(1) of the Regulations. I observe that there is no evidence before me that the parties have participated in the mediation process, which is usually a mandatory pre-requisite to the Tribunal being empowered to make orders in respect retail shop lease disputes.
- [40]The Tribunal is a creature of statute and must find its powers to make orders either in the QCAT Act or a relevant enabling Act. It does not have unlimited jurisdiction in respect of disputes between tenants and landlords.
- [41]A party to an eligible lease dispute,[31] being either an affected lease dispute[32] or a small business tenancy dispute[33] may give a notice of dispute to the small business commissioner.[34] If accepted the small business commissioner must nominate a mediator.[35] If the parties are unable to resolve the matter through mediation then a party may have a right to apply to the Tribunal for orders to resolve an eligible lease dispute, by filing a further Application as provided by section 41 of the Regulations and paying the prescribed fee.
- [42]If the dispute is not an eligible lease dispute but it is a retail tenancy dispute, the RSL Act provides for mediation of certain disputes,[36] and for referral by a mediator of certain disputes to the Tribunal.[37] If the parties are unable to resolve the matter through mediation then a party may have a right to apply to the Tribunal for orders to resolve a dispute as provided by section 64 of the RSL Act.
Footnotes
[1]Retail Shop Leases Act 1994 (Qld), s 5B (‘the RSL Act’).
[2]Filed 16 November 2020.
[3]Filed 16 November 2020.
[4]Filed 20 November 2020.
[5]Filed 9 December 2020.
[6]QCAT Act, s 58(2).
[7]Filed 7 December 2020.
[8]COVID-19 Emergency Response Act 2020 (Qld), s 23 (COVID Act).
[9]Ibid, s 23(6).
[10]Ibid, s 25 (as originally enacted).
[11]Ibid, s 4A.
[12]Regulations, Schedule 1.
[13]COVID Act, s 23(8).
[14]Ibid.
[15]Regulations, s 6.
[16]Ibid, Schedule 1.
[17]Ibid, s 5.
[18]Ibid, s 12(3)
[19]Ibid, s 9.
[20]Ibid, s 12(3).
[21]Ibid, s 12(2).
[22]Ibid, s 12(2)(b).
[23]Ibid, s 12(2)(c).
[24]Application for interim order, Part D.
[25]Lease, Schedule, item 7.
[26]Ibid, item 18.
[27]QCAT Act, s 58(1).
[28]Ibid, s 58(3).
[29]Regulations, s 12(5).
[30]QCAT Act, s 48.
[31]Regulations, s 21.
[32]Ibid, Schedule 1.
[33]Ibid.
[34]Ibid, s 26.
[35]Ibid, s 27.
[36]RSL Act, s 55.
[37]Ibid, s 63.